Supreme Court Refuses to Stay UPI Charges Above Rs 2000, Seeks Centre’s Response

Dil Bar Irshad | September 28, 2026 | 10:57 PM IST | Breaking News, Courts & Law, India | Follow on Google News

Supreme Court Refuses to Stay UPI Charges Above Rs 2000, Seeks Centre’s Response

NEW DELHI, September 28, 2026 (VoM News): The Supreme Court on Monday declined to put on hold the new Merchant Discount Rate (MDR) on targeted UPI merchant transactions of more than Rs 2000, which is likely to be effective from October 15.

The bench was constituted by Chief Justice of India Surya Kant and Justices Joymalya Bagchi and V. Mohana. They issued notices to the Centre, Reserve Bank of India and the National Payments Corporation of India (NPCI), calling for their replies in four weeks. The Supreme Court notice clarifies the bench.

The court also directed the Centre to produce an affidavit stating out the reasons for bringing in the UPI charges. “It appears that the issue pertains not only to legal, but to technical issues also,” the bench said while hearing the PIL.

Additional Solicitor General N Venkataraman, appearing for the Centre, told the court that close to 96 per cent of the UPI transactions would be unaffected by the charge. The government further claimed that it would not be sharing any part of the MDR.

We will charge a 0.4 per cent on the applicable transactions over Rs 2,000 for eligible person to merchant transactions from October 15, 2023. It will be merchant paid and not customer paid. Merchant transaction charges will not exceed Rs 300 on transactions of Rs 75,000 and above.

UPI transfers from one person to another will continue to be free, with the level of transfer not mattering. Payments to merchants of up to Rs 2,000 will also mostly stay outside the new MDR regime, along with small merchants getting up to Rs 1 lakh per month through UPI QR payments.

A flat Rs 5 MDR on Rs 2,000+ eligible transactions has been mandated for some of the low-hanging fruit of essential low-margin categories like railways, telecom, insurance and fuel.

Countering the MDR on the UPI, the petitioners pleaded that the decision will disincentivize cashless transactions and derail the current momentum of moving towards digital payment system. The apex court has not taken a call on the policy’s legality so far, deferring the interim relief request and asking for the state’s response.

Dil Bar Irshad

Dil Bar Irshad is a seasoned journalist, hails from Jammu Kashmir's Doda, covers political, social, business stories, index stories.